The oldest members of Generation Z are in their early twenties, and don’t typically make a lot of money. However, they already want to be homeowners. In fact, a recent report shows that almost 97% of Generation Z renters want to become homeowners, and 57% are confident it will happen.
Although many Gen Zers don’t know how they will pay a mortgage, and aren’t able to pinpoint exactly where they want to live, they are more optimistic than Millennials about homeownership.
This young and ambitious demographic, therefore, could disrupt the housing industry, and cause a major shift away from renting to owning a home.
Will Gen Z Be Different?
People born during the mid- 1990s to mid- 2000s are typically considered members of Generation Z.
They “seems to prize home ownership like no generation since their great-grandparents,” says Time Magazine, which inevitably sets them apart from other young generations that seem content to rent for the time being. There is some suggestion by Time that this generation doesn’t fully grasp what homeownership means, since they are still working through the reality of student loans, paying bills, and taking care of a home on their own. However, it is likely they will meet their goal of homeownership.
Why Will Gen Z Be Different?
Part of the desire to own a home by Generation Z could be the result of watching Millennials pay increasing rental prices, instead of paying a mortgage and working toward owning something.
But PSWC has a different take: “Just 65 percent of Americans own a home, while four in five are reconsidering their reasons for wanting to buy one. But, growing up in the shadow of the Great Recession and watching their older siblings boomerang back into the family nest, has instilled post-millennials with a longing for the security homeownership represents.”
Furthermore, Gen Zers may want to be homeowners because half of those who live outside of their childhood homes live in a space with less than 1,000 square feet. And, most of them share the living space, according to MarketWatch.
How Will Generation Z Pay for Homes?
The question still remains as to how Generation Z will pay their monthly expenses, save for a down payment and closing costs, and also be prepared to pay a monthly mortgage. With an increasing number of parents unable to help their families due to their own personal student loans, the question continues to linger.
Could there be further changes coming in the world of mortgages to enable Generation Z to become homeowners, while also allowing more Millennials to jump into homeownership? Only time will tell.
But one thing is for sure. If Gen Zers succeed in their desire to own a home, we’ll likely see a shift from renting to owning, which could cause the home building and house flipping industries to skyrocket again.
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers and homeowners in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.